Does Filtronic plc's (LON:FTC) CEO Pay Reflect Performance?
In 2015 Rob Smith was appointed CEO of Filtronic plc (LON:FTC). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Filtronic
How Does Rob Smith's Compensation Compare With Similar Sized Companies?
According to our data, Filtronic plc has a market capitalization of UK£15m, and pays its CEO total annual compensation worth UK£181k. (This is based on the year to May 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£157k. We examined a group of similar sized companies, with market capitalizations of below UK£164m. The median CEO total compensation in that group is UK£251k.
So Rob Smith receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Filtronic has changed from year to year.
Is Filtronic plc Growing?
Filtronic plc has increased its earnings per share (EPS) by an average of 115% a year, over the last three years (using a line of best fit). It saw its revenue drop -19% over the last year.
This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Filtronic plc Been A Good Investment?
Given the total loss of 45% over three years, many shareholders in Filtronic plc are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Rob Smith is paid around the same as most CEOs of similar size companies.
We'd say the company can boast of its EPS growth, but we find the returns over the last three years to be lacking. Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. Shareholders may want to check for free if Filtronic insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
